The US Dollar Index (DXY) refreshed session lows around 90.00 on Monday, amid a quiet start to the week, fundamentally speaking. Falling long-term bond yields helped suppress USD bulls, ensuring that the DXY reversed Friday’s gains.
Fresh triggers for the USD Index come from Thursday’s anticipated GDP result. The week is a quiet one on the news side of things, but comments from Fed officials or action from the bond market could be the dominant factors here. The FOMC minutes suggested that discussions on tapering could happen as early as the next Fed meeting. Other than this, the DXY is struggling to get a trigger for recovery.
The DXY is trading 0.13% lower as of writing.
Price continues to trade within the falling wedge, and today’s move is a reflection of this. The decline in the active daily candle came off a rejection at the wedge’s upper border. If the decline continues, it could make a touchdown at 89.711, which has held firm as support the entire week. If this level gives way eventually, 89.501 and 89.189 could become additional downside targets.
On the flip side, bulls would be looking for a support bounce followed by a break of the wedge’s upper border, which opens the door towards attaining the projected price of 90.965. This move would need to take out 90.228 and 90.503 along the way. Additional targets to the north at 91.50 and 92.00 only come into the picture if
bulls uncap the resistance at 90.965.
